Update August 2017

Stash has hit the 1,000,000 cus­tomer mile­stone! Crazy and good for Stash.

Overall

Man if this is the future, it’s excit­ing. Stash is pleas­ing to the eye, approach­able, and very easy to get start­ed.

Their posi­tion­ing on pur­pose is inter­est­ing and unique:

The Stash Way: Buy, hold, add.

Stash is designed for hold­ing invest­ments over the long term — not for fre­quent trad­ing. Why? It’s eas­i­er to get it right. If you try to pre­dict whether an invest­ment will go up or down in the short term, there’s a good chance you’ll get it wrong. Long term invest­ing is also less stress­ful, since you don’t have to obsess over dai­ly or week­ly price fluc­tu­a­tions of your invest­ments. Over the long term, the mar­ket has grown about 10% per year*. So make some invest­ments, hold onto them, and make more invest­ments on a reg­u­lar basis. And remem­ber, every dol­lar you put toward grow­ing your Stash is a dol­lar you are sav­ing, and not spend­ing.

Pros

Encourages buy & hold

Easily, very eas­i­ly, invest small amounts reg­u­lar­ly

Low fees, and fees align to their core val­ue of buy, hold, add (this is very impor­tant because it means their incen­tive are aligned to their cus­tomers — mean­ing, they are suc­cess­ful when their cus­tomer are suc­cess­ful)

Well designed UI

Allows you to invest in align­ment to your val­ues

Let me explain a bit about that last point. Investing in align­ment to you val­ues is some­thing I’ve writ­ten about a lot on this blog, and is a cor­ner­stone con­cept of my book and free email course. See this first email I got from Stash describ­ing an invest­ment option. I could see it being a very pow­er­ful moti­va­tor for some­one who was inter­est­ed in start­ing to invest, but wasn’t sure where to start.

My book and Stash are two dif­fer­ent ways to get to the same place — finan­cial secu­ri­ty and fam­i­ly wealth.

Cons

They’re enabling only Mutual Funds & ETFs, no indi­vid­ual stocks. For some­one just try­ing to get start­ed, this shouldn’t be a bar­ri­er to entry. Stash is not a good app for cre­at­ing an Elephant’s Paycheck port­fo­lio. Otherwise, go for it! If, like me, you pre­fer to buy indi­vid­ual stocks — here’s $5 to get start­ed with Stockpile. Using Stockpile you can buy frac­tion­al shares and rein­vest div­i­dends, and even buy stocks for your kids and rel­a­tives and track them all in one place.

The only track­ing met­ric is port­fo­lio val­ue. Which is real­ly not a healthy way to build a reg­u­lar invest­ing habit (I’ll dis­cuss this in detail below). Users emo­tions get killed by expect­ed (and nor­mal) mar­ket volatil­i­ty. If you’re inter­est­ed in read­ing about dif­fer­ent ways to mea­sure suc­cess have a look at: what else to mea­sure and why.

The app doesn’t work offline. If I want to check on my port­fo­lio sta­tus on my com­mute (NYC Subway) or air­plane, I’m out of luck. This is a pet peeve about bank­ing apps; and frankly, it shows poor care for expe­ri­ence that doesn’t endear me to the solu­tion.

Notifications are done via email, not mobile noti­fi­ca­tions (Apple Watch, hel­lo). There are noti­fi­ca­tions in app, but they don’t include all the noti­fi­ca­tions in email so now I’m get­ting more email that I don’t want, and noti­fi­ca­tions in the app that I have to dis­miss even though I’m get­ting them in email too. This should be eas­i­ly fix­able, if they have the pri­or­i­ty to do so. They’ve got to sup­port the Apple Watch, and do so prop­er­ly.

It’s not enough to make investing easy, it needs to be made motivating

Why is this con­stant up-and-down, with a lot of down, a prob­lem for investors? Negative rein­force­ment has a big­ger effect on our per­cep­tion than pos­i­tive. Extrapolating from mar­riage and the ide­al praise-to-crit­i­cism ratio we can expect that investors need a pos­i­tive ‘up to down ratio’. That’s a lot to expect.

In order to real­ly rein­force pos­i­tive invest­ing behav­ior, Stash (and every­one) has to think out­side the box for met­rics to make investors feel good about their invest­ing habit. I feel very strong­ly about this “human ele­ment” of an invest­ing strat­e­gy and chang­ing people’s per­cep­tion about invest­ing.

I have cre­at­ed a free course that you might enjoy to help you have fun as you get start­ed invest­ing, and with met­rics designed to keep you moti­vat­ed to stick to you plan. Please check it out, I hope you’ll enjoy it:

Money Making Money

I wrote a free email course specif­i­cal­ly for peo­ple who want to get start­ed invest­ing. In it, I will teach you how to get start­ed with as lit­tle as $10 using Stockpile, and then walk you through my unique met­rics designed for you to have fun and stay moti­vat­ed to build a healthy invest­ing habit.

Course atten­dees can down­load a spread­sheet tem­plate that I’ve cre­at­ed to high­light these met­rics. I even share a tuto­r­i­al that you can use to set­up your own track­er.

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A final word

While it looks like the list of cons is more thor­ough than the list of pros, don’t read into that too much. Stash is anoth­er way to accom­plish the same goals as the Elephant’s Paycheck. Stash is a sim­i­lar tra­di­tion­al invest­ing approach with­out most of the human aspects of the Elephant’s Paycheck Blueprint. Stash uses mod­ern tech­nol­o­gy to enable peo­ple to start mod­est­ly, build long term wealth, and most impor­tant­ly, invest in align­ment to their val­ues.

Fees

Since I felt that the fees weren’t dis­closed well enough in the sign up process, here you go:

$1/month, or 0.25% of bal­ance annu­al­ly (charged month­ly, cal­cu­lat­ed dai­ly) for bal­ances over $5,000 (at $5,000 that’s just over $1/month).

Who it’s for

Stash, like my book, is great for peo­ple just get­ting start­ed invest­ing, or peo­ple who want an easy way to put some­thing on auto­mat­ic and let it accu­mu­late.

As I said ear­li­er, it’s not a good com­ple­men­tary app for Elephant’s Paycheck invest­ing. Though is a good way to diver­si­fy some of your hold­ing from indi­vid­ual stocks (that I rec­om­mend for the Elephant’s Paycheck port­fo­lio) into funds.

The app itself doesn’t do any­thing to help you learn more about invest­ing to build mas­tery around your deci­sion mak­ing and habit. It would be great if each fund option linked to infor­ma­tion / news about the fund. Because they’re funds, they’re too abstract­ed from the indi­vid­ual hold­ings to link to 10Q’s or quar­ter­ly con­fer­ence calls, so that you can learn about your invest­ments. I don’t believe funds have quar­ter­ly calls or the equiv­a­lent of 10Q fil­ings. (Two oth­er rea­sons I pre­fer indi­vid­ual stocks.)

The app is also amaz­ing for peo­ple who want spe­cif­ic invest­ments that align to their val­ues. I love their focus to this goal. I know it’s impor­tant.

What I bought

Maybe I should have a dis­clo­sure page on this site, but I don’t. Mostly because I don’t make invest­ing rec­om­men­da­tions (I’m not advis­ing, just edu­cat­ing). But for the review, I thought it would be fun to tell you what I did.

I have put $20 in a Berkshire Hathaway track­ing fund. Of course, as I was writ­ing this post I noticed that I lost $0.31 this week. You can see how by giv­ing me no oth­er way to describe my results, I’m forced to share some­thing neg­a­tive. To eval­u­ate my per­for­mance in a way that might dis­cour­age you to give it a try. A shame, because you should.

If you’re curi­ous how I track my per­for­mance, you’re going to want to have a look at this free email course on track­ing invest­ments for peo­ple who are just get­ting start­ed invest­ing (and may not be invest­ing very much to get start­ed):

Money Making Money

I wrote a free email course specif­i­cal­ly for peo­ple who want to get start­ed invest­ing. In it, I will teach you how to get start­ed with as lit­tle as $10 using Stockpile, and then walk you through my unique met­rics designed for you to have fun and stay moti­vat­ed to build a healthy invest­ing habit.

Course atten­dees can down­load a spread­sheet tem­plate that I’ve cre­at­ed to high­light these met­rics. I even share a tuto­r­i­al that you can use to set­up your own track­er.

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Disclosure: The links in this post are affil­i­ate links. That means if you decide to invest with Stash I get paid. My integri­ty is worth more than any affil­i­ate pay­ment — I rec­om­mend Stash because it’s com­mend­able not because it’s com­mis­sion­able.

Thanks for vis­it­ing. I wor­ry about my future too, so we have that in com­mon.

Stash is real­ly good for cre­at­ing a reg­u­lar invest­ing habit, espe­cial­ly if you have only a small amount to invest. With Stash, you can invest a spe­cif­ic dol­lar amount, with­out wor­ry­ing how many “shares” you buy. With oth­er apps that allow you to buy stocks, you have to buy “whole shares” and so if you are invest­ing small amounts, and can’t buy a whole share, you’re stuck.

I feel, the best way to use Stash is to put away mon­ey on a reg­u­lar month­ly basis every sin­gle month and let it accu­mu­late.

One down side to Stash is the cost. It’s $1/month. That doesn’t sound like a lot, but if you’re invest­ing a small amount — say $10/month, that’s 10%. In oth­er words, in order to make up your fee, you have to grow your invest­ment by 10% (that’s a lot of growth). The way to think about this fee there­fore is not as a com­mis­sion, but as an oppor­tu­ni­ty to par­tic­i­pate in cre­at­ing a safer future. Without Stash, it’s hard to put away small amounts of mon­ey on a reg­u­lar basis.

Finally, if you’re liv­ing pay­check-to-pay­check, you may have to real­ly work to find even $10 or $25 a month to put away for the future. Good luck. It’s dif­fi­cult, but reward­ing. Drop me a line if you’d like to dis­cuss more pri­vate­ly.

I don’t know, you’d have to ask a dis­abil­i­ty con­sul­tant or per­haps a tax per­son. I will sug­gest that as invest­ment income, I would sus­pect it’s not the same as “work­ing”… but I have no expe­ri­ence to allow me to say that as any­thing but a spec­u­la­tion.

Hi Kay — For accounts over $5,000, you pay a fee of .25%, but I’d assume you’re also pay­ing the ETF fees on top of that, no? Above, your Defending America Portfolio shows an expense ratio of .43%. So, for that fund, you’re pay­ing .68% a year. Stash is prob­a­bly great for those who don’t have a lot to invest ini­tial­ly, but one might be bet­ter off with a free bro­ker­age account.

Really glad to have you par­tic­i­pate. You’re cor­rect math­e­mat­i­cal­ly (or at a min­i­mum, direc­tion­al­ly cor­rect in regards to over­all fees). However, a few things about Stash that I real­ly like that don’t nec­es­sar­i­ly com­pare to a pure math­e­mat­i­cal cal­cu­la­tion:

1. With Stash, you can get start­ed with as lit­tle as $5. $5,000 is a lot of mon­ey for many, and just sav­ing that amount presents a pret­ty high bar­ri­er. For less than that, Stash charges $1/month. And, while that tech­ni­cal­ly goes against the over­all return (again, I agree with you), I think that there is a val­ue to be had for mak­ing things acces­si­ble for peo­ple who are mod­est investors. On one hand, you might feel that a com­pa­ny that does that is tak­ing even more than oth­ers from the peo­ple who can least afford it. On the oth­er, it’s a com­pa­ny who is adding val­ue by mak­ing invest­ing small amounts pos­si­ble, and that val­ue should be paid for. You can think of the $1 as “con­tin­u­ing edu­ca­tion” rather than as a “cost basis” expense if it helps to under­stand my point of view. If all the com­pa­ny was doing was mak­ing invest­ing avail­able to mod­est investors, per­haps I’d ful­ly agree with you — they’re tak­ing more from the peo­ple who can least afford it. (Though, tech­ni­cal­ly the ETF fees aren’t some­thing Stash is tak­ing, the point remains). Stash does more… point #2.

2. Stash also, and this is real­ly impor­tant, breaks down bar­ri­ers to invest­ing by explain­ing things in plain English. This is so impor­tant. Because the com­pe­ti­tion is not a “free bro­ker­age” as you sug­gest, but is “not invest­ing”. “Not invest­ing” is not good for any­one. Stash is mak­ing invest­ing approach­able by let­ting peo­ple start with just $5 (point #1) but also by talk­ing in plain English and mak­ing it easy for peo­ple to under­stand what they’re doing which gives them the con­fi­dence that they can do it.

I think many peo­ple under­es­ti­mate how scary it is to invest if you’ve nev­er invest­ed before; how off-putting the lan­guage around it is. It’s almost as if it’s designed to put fear into new­bie investors.

One more thing I’d add — I’m a big fan of Robinhood. In fact, I gen­er­al­ly don’t like ETFs or Mutual Funds because they’re opaque (it’s hard to know what they’re up to) so for me, oth­er than the fact that Robinhood doesn’t sup­port div­i­dend rein­vest­ing, I’d per­son­al­ly pre­fer Robinhood over Stash. However, as I observe the Robinhood com­mu­ni­ty, it appears peo­ple use it to trade, not to invest. I’m a huge believ­ing in long term invest­ing and I share that with Stash. They’re on a focused mis­sion to help peo­ple build wealth, not gam­ble by trad­ing.

I think it’s so impor­tant to build habits that help peo­ple (and fam­i­lies) to build gen­er­a­tional wealth, that I’m will­ing to get past the ETF/Fund thing and sup­port Stash as an alter­na­tive to buy­ing indi­vid­ual stocks (in my pre­ferred way of div­i­dend invest­ing).

Thanks again for com­ment­ing, and shar­ing. You were very clear, and I hope help­ful to Kay.

I’m con­cerned about the secu­ri­ty of Stash. I don’t have a lot ov mon­ey to invest but I want to get start­ed. I got the app on my phone and start­ed the reg­is­tra­tion process. I stopped when they asked for my SS #. They also need my check­ing acct. info.
Looking for some guid­ance.
Angie

The thing is, every bro­ker­age is going to need your social secu­ri­ty num­ber.

In the case of Stash, they need your check­ing account num­ber for a few rea­sons, not least of which is their busi­ness mod­el and the $1/month fee which they take from your check­ing account (though not sure how you’d move mon­ey in to invest with­out doing that either).

I’ve giv­en them both, with no issues. Think of it as anoth­er bro­ker­age.

I just start­ed with Stash today. I’m curi­ous to see if it leads any­where. I’m not invest­ing much yet. I just want to get a lit­tle some­thing start­ed so when I start my 10-year plan in 2 years, I have some­thing worth get­ting me start­ed. I’m only invest­ing $5 — an amount that I gen­er­al­ly won’t even notice. If I like what I see, I will prob­a­bly increase that amount incre­men­tal­ly. If not, my loss­es won’t be sig­nif­i­cant enough to hurt my finances. So far, this is what I like about Stash, from day 1.

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About David

David Bressler is a tech exec­u­tive who began offer­ing finan­cial coach­ing after notic­ing how lit­tle peo­ple know about invest­ing. Since then he has made it his mis­sion to help as many peo­ple as he can learn how to build sus­tain­able wealth and gain finan­cial flex­i­bil­i­ty.

Bressler, who earned his MBA at New York University’s Stern School of Business, writes and speaks about how adopt­ing a few sim­ple habits can dra­mat­i­cal­ly improve your finan­cial future. He lives in New York City with his wife and two chil­dren. The Elephant in the Room has a Paycheck is his first book.